Lending Guide

Michigan Hard Money Lending Guide

Hard money lending is short-term, asset-based real estate financing built for investors who need capital faster than a bank can move. This guide explains how hard money loans work in Michigan, how Uccello Capital underwrites fix & flip and new construction deals, and what to expect from application through closing.

How hard money lending works in Michigan

A hard money loan is a short-term loan secured by real estate rather than by a borrower's income or credit score. Traditional lenders qualify a borrower on tax returns, W-2 income, and debt-to-income ratios, a process that routinely takes thirty to sixty days. A hard money lender underwrites the property instead: the purchase price, the after repair value (ARV), the rehab budget, and the borrower's exit strategy. Because the lending decision rests on the asset, approval and funding can happen in days.

Standard terms at Uccello Capital

Uccello Capital lends on fix & flip and new construction projects across Michigan. Our standard terms are 13.5% annual interest with interest-only payments, a 1% origination fee with a $1,500 minimum, and a maximum loan of 70% of the after repair value. Loan terms run from one to twelve months. On deals that stay within the 70% loan-to-value limit, we fund 100% of the purchase price and the rehab budget, which means a borrower with a strong deal can get into a property with little or no money down.

Loan-to-value, ARV, and cash out of pocket

Loan-to-value is calculated by dividing the total amount requested, purchase price plus rehab budget, by the after repair value. If a property will be worth $350,000 after repairs and a borrower requests $245,000, the LTV is 70%. A request above 70% exceeds our maximum loan, and the difference between the request and the cap becomes cash the borrower brings to closing. Our loan calculator runs this math instantly, so investors can screen a deal before they write an offer.

Why closing speed matters to investors

Speed is the point. In competitive Michigan markets, a seller with multiple offers chooses certainty. An investor holding a bank pre-approval still has to clear underwriting, appraisal, and closing timelines that stretch for weeks, and the deal can fall apart in the gap. Hard money removes those variables. We make decisions directly with the borrower, typically fund five to ten days after a completed application, and close on a date the borrower sets rather than a date the bank allows.

How rehab funds are disbursed

Rehab funds are released in draws tied to completed work rather than advanced all at once. Borrowers submit a draw request with photos and receipts, our team reviews the progress, and the next stage of funds is released. This keeps capital aligned with construction progress, protects the project budget, and keeps renovation timelines on track.

Hard money lending topics

Plain-language explanations of the concepts that come up most often when financing a fix & flip or new construction project.

Basics

What Is a Hard Money Loan?

A hard money loan is a short-term real estate loan secured by the property instead of the borrower's income or credit score. It is underwritten on the asset, which is why it funds in days rather than weeks.

Traditional lenders qualify a borrower on tax returns, W-2 income, and debt-to-income ratios. A hard money lender underwrites the property instead, looking at purchase price, after repair value, rehab budget, and the borrower's exit strategy. Because the decision rests on the asset, hard money is used most often by real estate investors on fix & flip and new construction projects.

Underwriting

Understanding ARV and Why It Drives Your Loan

After repair value (ARV) is the estimated market value of a property once renovations are complete. It sets the ceiling on how much a hard money lender can advance.

ARV is established by comparable sales in the area, adjusted for the scope of work planned. Uccello Capital lends up to 70% of ARV, so a property with a $350,000 ARV supports a maximum loan of $245,000. Because ARV is the anchor for the entire loan amount, investors should underwrite it conservatively and keep supporting comps handy.

Fix & Flip

Fix & Flip Financing: Purchase Plus Rehab

Fix & flip loans cover the acquisition and renovation of a property in a single short-term loan, with rehab funds released in draws as work is completed.

On deals that stay within the 70% LTV limit, Uccello Capital funds 100% of both the purchase price and the rehab budget. Payments are interest-only, so cash flow stays focused on the renovation. Borrowers typically exit by selling the finished property or refinancing into a long-term loan.

New Construction

New Construction Loans and Draw Schedules

Ground-up construction financing requires a lender that understands construction timelines. Funds are released in stages tied to completed milestones.

New construction has no existing structure to appraise, so underwriting leans harder on the plans, the budget, and the builder's track record. Uccello Capital funds 100% of purchase and construction costs within 70% LTV, with draws tied to completed stages of work. Staying engaged through the loan term helps keep the project on schedule.

Process

How Fast Can a Hard Money Loan Close?

Uccello Capital typically closes five to ten days after a completed application, because decisions are made directly with the borrower rather than through a committee.

Speed comes from underwriting the property instead of the borrower's tax history. The main variables that affect timing are title work and arranging access for the property inspection. Investors who submit a complete application with clear scope of work and realistic numbers routinely close inside ten days.

Michigan Market

Investing in Michigan: Why Certainty Wins Deals

In competitive Michigan markets, sellers weigh certainty as heavily as price. A cash-equivalent offer with a firm closing date often beats a higher offer that depends on bank financing.

Michigan investors compete for the same distressed and value-add inventory, and a financed offer that takes forty-five days gives a seller little confidence. Hard money turns an investor into a near-cash buyer: proof of funds, no financing contingency, and a closing date the borrower controls. That combination is what wins deals in markets like Grand Rapids, Detroit, and Kalamazoo.

Frequently asked questions

Short answers to the questions we hear most from Michigan real estate investors about hard money financing.

What is a hard money loan?

A hard money loan is a short-term real estate loan secured by the property rather than by the borrower’s income or credit score. Instead of qualifying on tax returns and debt-to-income ratios, a hard money lender underwrites the asset: the purchase price, the after repair value, the rehab budget, and the borrower’s exit strategy. Because the decision rests on the property, funding can happen in days instead of weeks.

How fast can Uccello Capital close a loan?

Uccello Capital typically closes five to ten days after a completed loan application, depending on title work and property access for the appraisal. We make lending decisions directly with the borrower, so there is no committee review or multi-week underwriting cycle in between.

What is the maximum LTV on a hard money loan?

Uccello Capital lends up to 70% loan-to-value based on the after repair value (ARV). LTV is calculated by dividing the total amount requested, purchase price plus rehab budget, by the ARV. A deal at or under 70% LTV can have 100% of the purchase and rehab funded.

What are the interest rate and fees?

Standard terms are 13.5% annual interest with interest-only payments, a 1% origination fee with a $1,500 minimum, and loan terms ranging from one to twelve months. There are no prepayment penalties, so a borrower can exit as soon as the project sells or refinances.

What happens if my deal exceeds 70% LTV?

When the total request, purchase price plus rehab budget, exceeds 70% of the after repair value, the difference becomes cash out of pocket that the borrower brings to closing. The loan is capped at 70% of ARV, and the amount above that cap is the shortfall the borrower funds directly.

How are rehab funds disbursed?

Rehab funds are released in draws tied to completed work rather than advanced up front. The borrower submits a draw request with photos and receipts, our team reviews the progress, and the next stage of funds is released. This keeps capital aligned with construction progress and keeps the project timeline on track.

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